Performance Improvement – NBC Institute

FM – Nov 2021 – L3 – Q4 – Corporate Governance and Financial Strategy

Assess LL's corporate objectives, the finance director's view, and treasury strategies within a low-interest economic environment.

Question

Leye Limited (LL) is a privately-owned toy manufacturer in Nigeria, operating internationally as both a supplier and a customer. While privately owned, LL’s revenue and asset base are comparable to some publicly listed companies. It has numerous shareholders but has no plans for public listing. Major shareholders have expressed an interest in buying out smaller investors.

LL has a strong history of profitability, which satisfies both directors and shareholders. They avoid strategies that increase risk significantly, such as acquisitions or overseas manufacturing setups, accepting a comparatively lower growth rate than competitors.

The company’s capital structure is composed of 70% equity and 30% debt (based on book values), with debt comprising secured and unsecured bonds carrying interest rates between 7% and 8.5%, maturing in 5 to 10 years. In a low-inflation and potentially declining interest rate environment, the company treasurer is exploring refinancing options.

LL’s primary financial objective is annual dividend growth, with a non-financial objective of treating all stakeholders with fairness and equality. The Board is currently reassessing these objectives. While the new Finance Director advocates for shareholder wealth maximization as the sole objective, other directors favor a balanced approach, including goals such as profit after tax, return on investment, and operational performance improvements.

Required:

a. Evaluate the appropriateness of LL’s current objectives and the Finance Director’s suggestion. Discuss the issues the Board should consider in setting new corporate objectives, concluding with a recommendation. (10 Marks)

b. Discuss factors the treasury department should consider when formulating financing or refinancing strategies in the given economic context. Explain how these factors might influence the determination of corporate objectives. (10 Marks)

Answer

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Topic: Corporate Governance and Financial Strategy

CSEG – May 2017 – L2 – Q6a – Strategy evaluation and control

Discuss strategic issues for Adama Group and explain how the Balanced Scorecard can be used to monitor performance.

Question

The chairman of Adama Group, which is large and diversified, has expressed concern about the inadequacies of the present voluminous monthly reports submitted to the Board. He acknowledges that it compares budget and actual results for all operations, and that it contains extensive reporting of non-financial indicators such as customer satisfaction and factory performance towards Total Quality Management (TQM). However, he regards much of this as operational detail, and considers that the report should place more emphasis on strategic issues.

A strategy consultant is currently assisting the Group to implement a Balanced Scorecard to effectively monitor the performance of managers.

Required:

i) Explain THREE strategic issues that should engage the attention of the Board of Directors of Adama Group. (6 marks)

ii) Explain how Balanced Scorecard can be used to monitor and measure performance in Adama Group. (10 marks)

Answer

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Tags: Benchmarking, Performance Improvement, Strategic Management
Level: Level 2

Topic: Strategy evaluation and control
Series: MAY 2017

CSEG – Nov 2017 – L2 – Q6a – Strategy evaluation and control

Explain the concept of benchmarking and identify the advantages that companies gain from benchmarking.

Question

In the business world, companies use benchmarking as a point of reference. Benchmarking occurs across all types of companies and industries. Many companies have positions or offices that are in charge of benchmarking.

Required:

i) Explain the term benchmarking. (2 marks)

ii) Explain FOUR advantages companies gain from benchmarking. (8 marks)

Answer

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Tags: Benchmarking, Performance Improvement, Strategic Evaluation
Level: Level 2

Topic: Strategy evaluation and control
Series: NOV 2017

FM – Nov 2021 – L3 – Q4 – Corporate Governance and Financial Strategy

Assess LL's corporate objectives, the finance director's view, and treasury strategies within a low-interest economic environment.

Question

Required:

Answer

Find Related Questions by Tags, levels, etc.

Topic: Corporate Governance and Financial Strategy

CSEG – May 2017 – L2 – Q6a – Strategy evaluation and control

Discuss strategic issues for Adama Group and explain how the Balanced Scorecard can be used to monitor performance.

Question

A strategy consultant is currently assisting the Group to implement a Balanced Scorecard to effectively monitor the performance of managers.

Required:

i) Explain THREE strategic issues that should engage the attention of the Board of Directors of Adama Group. (6 marks)

ii) Explain how Balanced Scorecard can be used to monitor and measure performance in Adama Group. (10 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Benchmarking, Performance Improvement, Strategic Management
Level: Level 2

Topic: Strategy evaluation and control
Series: MAY 2017

CSEG – Nov 2017 – L2 – Q6a – Strategy evaluation and control

Explain the concept of benchmarking and identify the advantages that companies gain from benchmarking.

Question

Required:

i) Explain the term benchmarking. (2 marks)

ii) Explain FOUR advantages companies gain from benchmarking. (8 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Benchmarking, Performance Improvement, Strategic Evaluation
Level: Level 2

Topic: Strategy evaluation and control
Series: NOV 2017

Question Tag: Performance Improvement

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FM – Nov 2021 – L3 – Q4 – Corporate Governance and Financial Strategy

Assess LL's corporate objectives, the finance director's view, and treasury strategies within a low-interest economic environment.

Required:

CSEG – May 2017 – L2 – Q6a – Strategy evaluation and control

Discuss strategic issues for Adama Group and explain how the Balanced Scorecard can be used to monitor performance.

CSEG – Nov 2017 – L2 – Q6a – Strategy evaluation and control

Explain the concept of benchmarking and identify the advantages that companies gain from benchmarking.

FM – Nov 2021 – L3 – Q4 – Corporate Governance and Financial Strategy

Assess LL's corporate objectives, the finance director's view, and treasury strategies within a low-interest economic environment.

Required:

CSEG – May 2017 – L2 – Q6a – Strategy evaluation and control

Discuss strategic issues for Adama Group and explain how the Balanced Scorecard can be used to monitor performance.

CSEG – Nov 2017 – L2 – Q6a – Strategy evaluation and control

Explain the concept of benchmarking and identify the advantages that companies gain from benchmarking.

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Question Tag: Performance Improvement

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FM – Nov 2021 – L3 – Q4 – Corporate Governance and Financial Strategy

Assess LL's corporate objectives, the finance director's view, and treasury strategies within a low-interest economic environment.

Required:

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CSEG – May 2017 – L2 – Q6a – Strategy evaluation and control

Discuss strategic issues for Adama Group and explain how the Balanced Scorecard can be used to monitor performance.

You're reporting an error for "CSEG – May 2017 – L2 – Q6a – Strategy evaluation and control"

CSEG – Nov 2017 – L2 – Q6a – Strategy evaluation and control

Explain the concept of benchmarking and identify the advantages that companies gain from benchmarking.

You're reporting an error for "CSEG – Nov 2017 – L2 – Q6a – Strategy evaluation and control"

FM – Nov 2021 – L3 – Q4 – Corporate Governance and Financial Strategy

Assess LL's corporate objectives, the finance director's view, and treasury strategies within a low-interest economic environment.

Required:

You're reporting an error for "FM – Nov 2021 – L3 – Q4 – Corporate Governance and Financial Strategy"

CSEG – May 2017 – L2 – Q6a – Strategy evaluation and control

Discuss strategic issues for Adama Group and explain how the Balanced Scorecard can be used to monitor performance.

You're reporting an error for "CSEG – May 2017 – L2 – Q6a – Strategy evaluation and control"

CSEG – Nov 2017 – L2 – Q6a – Strategy evaluation and control

Explain the concept of benchmarking and identify the advantages that companies gain from benchmarking.

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